VAN Payments Improve Data Security

Keeping online payments secure is a vital concern for businesses dealing with valuable company data on a daily basis. These B2B transactions have traditionally required a lot of time and resources to manage effectively, so it is not surprising that we have recently seen a shift towards VAN (Virtual Account Number) payments led by Online Travel Agencies (OTAs). This digital travel transformation is simplifying, streamlining and increasing security for B2B payments between OTAs and their suppliers, boosting industry growth and changing the way it operates for the better.

What is a Virtual Account Number?

A VAN is an automatically generated, 16-digit card number, created at the point of sale or booking. It operates in exactly the same way the account number on the front of a plastic credit card does and is accepted anywhere that currently supports online Mastercard payments. However, the difference between a VAN and a credit card number is that with VAN payments, a new, unique number is generated for each individual transaction, making it a highly secure method of payment. Companies using VAN payments can place restrictions on its usage, limiting spending, time frame and supplier choice, giving the business a greater amount of control over its finances.

The benefits of VAN payments

The benefits that virtual account numbers bring to B2B payments are threefold. The most important of course being the increased data security offered by choosing such a method. Whilst traditional account numbers may be used by multiple OTAs, memorised by numerous individuals and stored unsafely on devices, leaving companies exposed to the threat of data theft, the one-off randomisation of a generated VAN keeps data secure throughout the sales process, reducing the risk of fraudulent behavior or supplier default.

The second benefit addresses company control. VAN payments allow transaction data to be customised and tracked throughout the booking process, giving businesses a clear audit trail without additional interruptions to the payment interface. Because VAN payments are universal to most suppliers, all payments can be traced on the same system and integrated into existing workflows making it easy to find detailed information on each transaction.

Finally, and perhaps most transformative when it comes to company operations, is the benefit of simplicity. VANs simplify payments online by offering automatic reconciliation meaning payment delays are a thing of the past. Manual reconciliation of purchases and payment statements can be a drain on company time and resources, not to mention the threat of human error. By removing this aspect from the payment process, VANs can keep suppliers happy and free up admin time for better uses, helping to streamline the business.

How OTAs have embraced this digital transformation

Given the benefits of virtual accounts, it is easy to see why OTAs are one of the leading industries when it comes to using VAN payments. Booking holidays online has become the norm for many people around the world with online travel sales projected to grow from $530 billion+ in 2015 to $760 billion+ by 2019. This 2015 figure accounts for 53% of all travel bookings globally and that number will only go up. OTAs are a booming industry, acting as an intermediary between customers and suppliers and by using VAN payments, they are able to ensure the transaction is secure and seamless for all parties involved. VANs are used for booking airline flights, hotels and car rentals as well as many other travel purchases, and the VAN payment method ensures that the needs of these multiple customers and suppliers are met with guaranteed immediate payment processing, faster transaction times and to-the-minute offers. The reduced administration of using virtual account numbers facilitates the industry growth as there are less IT security staff required, saving companies time and money.

It is doubtless that VAN payments are the future of B2B online transactions, so much so that there is currently a push for future developments that incorporate even more flexibility in the process. They are transforming the digital landscape for industries like Online Travel Agencies and it is likely this influence will spread to other B2B organisations operating multiple supplier transactions in the near future.

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